Proposals target efficiency

Purchases of energy-saving appliances would bring tax breaks.

Purchases of energy-saving appliances would bring tax breaks.

February 09, 2007|BRIAN McVICAR Capital News Service

LANSING -- Looking to reduce air pollution and energy use, legislators have again proposed a sales tax exemption for energy-efficient home appliances. Under the proposals, no sales tax would be charged on home appliances that meet the Energy Star guidelines developed by the U.S. Environmental Protection Agency. One sponsor said the tax break would make expensive energy-efficient appliances more affordable. "It aims at taking energy guzzlers out of our homes and off the markets," said state Rep. John Proos, R-St. Joseph. Energy Star appliances include washing machines, freezers, refrigerators, room air conditioners and dishwashers. According to the Association of Home Appliance Manufacturers, a national trade organization, 32 percent of washing machines and 37 percent of refrigerators manufactured in 2005 met the Energy Star standard. David Gard, the energy program director at the Michigan Environmental Council, said the proposal is a step in the right direction. "It has to start with efficiency in this state," he said. "This definitely gives retailers the incentive to move these products over others." Energy-efficient appliances reduce the amount of energy people use, which saves money, Gard said. And saving money is one reason Proos introduced the legislation. According to Energy Star, a joint program of the U.S. Department of Energy and the EPA, its appliances consume less energy than regular ones. Here are the amounts:

Washing machines -- 35 percent

Dishwashers -- 25 percent

Refrigerators and freezers -- 15 percent

Televisions -- 25 percent

Room air conditioners -- 10 percent

But the idea will likely face opposition. According to an analysis by the House Fiscal Agency, the tax break would reduce the state's annual revenue by $20 million to $25 million. The state collected $6.5 billion in sales tax in 2006, Treasury figures show. That lost revenue would be made up in the long run, Proos said, because lower energy bills will free people to spend their money on other things. "Consumers would save more by having energy-efficient home appliances," he said. State Rep. Kim Meltzer, R-Clinton Township, said she supports the bill: "It's an opportunity to spark the economy." But she has concerns, too: "Balancing the budget is also important." Eric Rule, director of government affairs at the Michigan Retailers Association, said his organization supports the idea. He said retailers are interested in legislation that will help them sell more appliances. "If there's ways to reduce our energy needs and be efficient, we're going to be behind it," he said. "Businesses are in favor of it." Another sponsor, Rep. Frank Accavitti, who chairs the Energy and Technology Committee, said he would like the tax break passed before the spring. "I'd like to be able to have people buy more efficient air conditioners before the summer," the Eastpointe Democrat said. Similar proposals failed to pass the legislature last year.